Tag: Motley Fool Australia

The BlueScope Steel Limited (ASX: BSL) share price fell this morning after management forecasted earnings to more than halve and a circa $200 million write-down.

Shares in the steel products maker slipped 0.6% to $11.32 when the S&P/ASX 200 Index (Index:^AXJO) gained 0.2% at the time of writing.

But it may not be its earnings guidance or the large provisioning that’s knocking the wind out of the BlueScope share price.

Earnings weakness not the main drag

Management expects underlying earnings before interest and tax (EBIT) to come in around $560 million for FY20 with $260 million of this attributed to the COVID-19 affected June half. This compares to the $1.4 billion it posted in FY19.

That’s actually not too bad given the economic hit from the coronavirus pandemic on countries that the group operates in.

Further, analysts were expecting the last financial year to be weak anyhow. For instance, Credit Suisse pencilled in a net profit of $318.7 million for FY20 when BlueScope reported an underlying net profit of $966.3 million in FY19.

Write-down is no surprise

I doubt anyone would be surprised by the write-down of its underperforming businesses too when so many others are doing the same. Woodside Petroleum Limited (ASX: WPL) and Origin Energy Ltd (ASX: ORG) are but to recent examples.

I believe it’s the sombre outlook that’s weighing on the stock instead.

Uncertain outlook

Management warned that steel spreads in North America and Asia have weakened since the start of this financial year compared to the average achieved in the 2HFY20.

“Further, while at this point orders and despatches in Australia remain stable and North Star is despatching near full capacity, there is a high level of uncertainty in the current environment,” said BlueScope in its ASX statement.

This isn’t only due to COVID-19 directly impacting on demand, supply chains and operations, but the broader economic fallout that’s expected to dampen demand for its products.

Management said it will provide more details on trading conditions when it releases its full year results on 17 August.

Shiny side to BlueScope’s results

On the bright side, the $100 million that BlueScope’s holding on its balance sheet should provide it enough firepower to get through the turmoil.

Its US North Star business is also performing better than expected with utilisation rates staying above 90% through the second half of FY20. This is despite the shutdown of key industries like automobile from mid-March to mid-May.

BlueScope’s Building Products Asia & North America is also surprisingly resilient with its second half result coming in at around the same as the first half.

I think the stock is cheap despite the uncertain outlook. Having said that, I don’t think the BlueScope share price will be going anywhere till management provides a further update in a month’s time.

More reading

• Why this fundie sees an ASX bank share recovery
• Are Transurban shares a hot buy today?
• 5 things to watch on the ASX 200 on Friday
• Market close: ASX 200 drops 0.7% today
• The ASX tech ETF you can buy and hold forever

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post BlueScope’s earnings to halve as it takes $200m write-down appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Oye5V2

The Cann Group Ltd (ASX: CAN) share price has tanked this morning after the cannabis grower announced a $24.3 million capital raising at a steep discount to yesterday’s closing price. Shares were trading down 16% at the open in response to the raising, which aims to provide working capital. Since then, the Cann Group share price has continued edging lower and is currently sitting at 66 cents at the time of writing.

What does Cann Group do? 

Cann Group is a cannabis cultivator with a vision to be a leading developer and supplier of medicinal cannabis products. The company has established cultivation and R&D facilities in Australia and is pursuing a fully-integrated business model that will enable it to establish a leading position in plant genetics, breeding, cultivation, production and manufacture of medicinal cannabis products. 

In January, the company announced a strategic reset in response to disruption in the global cannabis market. An excess supply of cannabis meant the company chose to focus on initially meeting Australian domestic demand while reducing operating expenses to transition to profitability. Plans for Cann Group’s new Mildura facility were revised to take a staged approach to construction given higher than expected supply of cannabis globally. To date, funding for construction has not been secured due to the impacts of COVID-19. 

What are the details of the capital raising? 

Cann Group is raising capital to support its near-term growth plans. The company is not yet profitable and reported an operating loss of $8.4 million for 1H FY20. At 31 December 2019, Cann Group reported cash and cash equivalents of $8 million, down from $43 million at 30 June 2019. In February this, year Cann Group completed the issue of $8 million in convertible notes to provide for working capital purposes. 

Under the current capital raising, Cann Group has received firm commitments from sophisticated and institutional investors to raise $14.3 million at 40 cents per share. Up to $10 million will be raised under the share purchase plan with shares issued at 40 cents. The Cann group share price hit a high of $1.69 in January before dropping to a low of 61 cents in March. Shares were trading at 82 cents at close of market yesterday, meaning the capital raising is occurring at more than a 50% discount to yesterday’s share price. 

What is the outlook for Cann Group? 

Cann Group is predicting revenues of $15 million in FY21, underpinned by existing supply contracts. Commercial supply agreements for medicinal cannabis products and dried flower products have been secured for Australia and export markets, including the United Kingdom and Europe. While its major shareholder, Aurora Cannabis Inc, did not participate in the placement, Cann Group believes Aurora remains committed to the strategic relationship. 

More reading

• Why Cann, Flight Centre, Helloworld, & Zip shares are dropping lower
• Althea share price lifts as cannabis market growth predicted

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Cann Group share price tanks on discounted capital raising appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3eAO8il

In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing the benchmark index is up 0.15% to 6,020.8 points.

Four shares that are climbing more than most are listed below. Here’s why they are charging higher:

The Alumina Limited (ASX: AWC) share price is up over 4% to $1.80. The catalyst for this gain is likely to have been a broker note out of Credit Suisse today. Its analysts have upgraded Alumina’s shares to an outperform rating with an improved price target of $2.00. It believes the company’s outlook is improving greatly thanks to lower unit costs and a rebounding aluminium sector.

The BWX Ltd (ASX: BWX) share price has jumped 5.5% higher to $3.86. Investors have responded positively to the personal care products company’s equity raising and trading update for FY 2020. This morning the company behind the Sukin brand raised $40 million via a placement to fund the development and construction of a game-changing, world class manufacturing facility. BWX also revealed a 25% increase in unaudited revenue to $187.6 million and a 30% lift in EBITDA (pre-AASB 16) to $27.5 million for FY 2020.

The Life360 Inc (ASX: 360) share price is up over 4% to $3.16. This morning analysts at Credit Suisse retained their outperform rating and lofty $4.80 price target on the family-focused app platform company’s shares. This follows the announcement of new membership plans on Thursday. The broker believes this could be a step-change for Life360 and sees a potential significant re-rating of its shares in the future.

The Perpetual Limited (ASX: PPT) share price has climbed over 3.5% to $32.90. This appears to have been driven by a broker note out of Citi this morning. Its analysts were pleased with Perpetual’s business update and upgraded its shares to a neutral rating from sell with an improved price target of $32.00. It feels that there are signs that its performance is turning around at long last.

More reading

• BWX share price storms higher after $40 million placement and strong FY 2020 growth
• Market close: ASX 200 drops 0.7% today
• BWX delivers strong growth in FY 2020 and announces $50 million equity raising
• Leading brokers name 3 ASX shares to buy today
• Why Afterpay, Alumina, Magellan, & Webjet shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Alumina, BWX, Life360, & Perpetual shares are charging higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3eDoj0U

If you have a high tolerance for risk, then I feel it would be well worth gaining some exposure to the small cap side of the market.

This is because if you can find the next blue chip share when it is still only a small cap, you could generate mouth-watering returns.

A prime example of this is Ramsay Health Care Limited (ASX: RHC). The global private hospital operator has gone from being a reasonably small player to an industry juggernaut over the last couple of decades.

In fact, in 2000 you could have picked up Ramsay’s shares for 80 cents each. This means that a $5,000 investment at that point would have given you 6,250 shares.

This morning the Ramsay share price is changing hands for $63.22, which gives those 6,250 shares a valuation of approximately $400,000.

In addition to this, in FY 2021 Ramsay is being tipped to pay fully franked dividends of $1.28 per share.

This means those 6,250 shares you picked up in 2000 will be generating a tidy $8,000 in dividends next year. That’s $3,000 more than your original investment!

Overall, I believe this demonstrates why buying quality small cap ASX shares has the potential to have a very positive impact on a balanced a portfolio.

But which small cap ASX shares should you buy today?

It is worth remembering that for every Ramsay, there are countless small cap ASX shares that fail to live up to expectations.

However, I believe you can increase your probability of success by focusing on small cap shares with strong business models, large addressable markets, and industry-leading products.

Three small cap ASX shares which I think tick a lot of boxes and could be worth investigating further are sales enablement software provider Bigtincan Holdings Ltd (ASX: BTH), HR and payroll software provider ELMO Software Ltd (ASX: ELO), and cloud communications platform provider Whispir Ltd (ASX: WSP).

More reading

• Why these excellent ASX healthcare shares could be long-term market beaters
• ASX 200 jumps almost 2% today, Afterpay rises
• 2 ASX tech shares with stellar growth prospects
• Why Afterpay, ELMO, Oil Search, & Paradigm shares are racing higher
• ASX tech star ELMO Software delivers strong growth in FY 2020 despite the pandemic

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, Elmo Software, Ramsay Health Care Limited, and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to get rich by investing in small cap ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZAykYv

The Openpay Group Ltd (ASX: OPY) share price has been on the move this week with the buy now, pay later (BNPL) provider reporting record growth across leading indicators. Openpay recorded strong growth in customer and merchant numbers, as well as a significant increase in total transaction value in 4Q FY20. 

What does Openpay do?

Openpay operates in the BNPL sector and listed on the ASX last year at an offer price of $1.60 per share. Openpay targets a slightly different market to Afterpay Ltd (ASX: APT), focusing on longer and higher value plans. Openpay’s BNPL plans range from 2 to 24 months duration, and allow for values between $50 and $20,000. Its customer base tends to be a little older (often with higher transaction values) than the average BNPL customer. 

What did Openpay announce? 

Openpay announced record growth across its leading indicators in 4Q FY20, along with rapid business growth in the United Kingdom. Active customer numbers grew 141% relative to the prior corresponding period (a new record), reaching 319,000. Active plans grew 229% to 824,000, with notable improvements seen in the healthcare, retail, and automotive verticals.

Total transaction value grew to a record $192.8 million for the full year, up 98.2% compared to FY19 and 119% for the quarter. The move to digital commerce was evident in Openpay’s results, with online channels accounting for 39% of plan originations in Q4 FY20 compared to 14% in Q4 FY19. Nonetheless, Openpay has observed that previously deferred purchases and consumption of essential services in healthcare (e.g. dental treatments) and automotive (e.g. car servicing) which typically happen in-store started picking up again in late June. 

Openpay CEO Michael Eidel said, “This period of historic growth for Openpay was set against a backdrop of COVID-19 related global market volatility”. He went on to say “As more customers sought better ways to structure purchases across their life needs, we saw a strong surge in new customers and plans”. 

Openpay also saw strong growth in its UK business, with active customers increasing 95% and active plans 103% between the end of March and the end of June 2020. A major agreement with 2.1 billion pound retailer, JD Sports, was launched, with initial trading well above expectations. The UK business, which was launched in June 2019, operates in the online channel only. 

What’s next for the Openpay share price? 

The Openpay share price saw strong gains early this week ahead of the announcement, climbing 50% across Monday and Tuesday. The share price hit a high of $4.84 immediately after the announcement on Wednesday, but has since slid lower, and is currently trading at $3.48. Nonetheless, the Openpay share price remains 19% above its close last week. 

The BNPL provider is launching in new industry verticals including Education and Memberships. Integrations with leading retail and eCommerce platforms including Big Commerce and Hybris are expected to extend Openpay’s reach into thousands of additional merchants in Australia and the UK.

More reading

• How to pick an ASX 200 share market bubble
• ASX BNPL shares: should you invest in the fastest growing industry of 2020?
• 2 ASX shares I’d buy if the market crashes again
• 3 reasons the Openpay share price is better than Afterpay
• ASX 200 jumps almost 2% today, Afterpay rises

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Openpay share price on the move as key metrics boom appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2CmkcJz

Consumer confidence has taken a hit as a result of renewed lockdowns, falling 6.1% this month. The unemployment rate is also up with close to a million Australians out of work. This is bad news for the economy, with hopes of a v-shaped recovery fading. When the economy looks shaky, investors often turn to gold as a measure of protection. 

Gold can act as a hedge against economic downturns. This is because its value is (for the most part) inversely correlated to the value of shares. Although the gold price can be volatile over the short term, the previous metal tends to preserve its value over time.

Here are 3 ASX gold shares you can use to hedge your portfolio against a downturn. 

Saracen Mineral Holdings Limited (ASX: SAR)

Saracen Mineral Holdings mines gold in the Kalgoorlie region of Western Australia. In the June quarter, the company produced 145,803 ounces of gold. Full year production was a record 520,414 ounces. The miner reported it had cash and bullion of $369.3 million at 30 June 2020, along with $321.5 million debt. This gave Saracen a net cash position of $48 million. 

The Saracen share price is up by 68% since the start of 2020, trading for $5.84 per share.

Gold Road Resources Ltd (ASX: GOR)

Gold Road Resources is a mid-tier Australian gold producer with projects in Western Australia’s north-eastern goldfields. The company owns 50% of the Gruyere mine, which is forecast to produce an average of 300,000 ounces of gold annually for at least 11 years.

In the March quarter, the Gruyere mine produced 59,595 ounces of gold and is on track to meet full year guidance of 250,000 to 285,000 ounces. The company ended the quarter with cash and bullion on hand of $115 million. Debt was $80 million giving a net cash position of $35 million. 

Gold Road shares are sitting at $1.79 per share at the time of writing, up 30.88% year to date.

Silver Lake Resources Limited (ASX: SLR)

Silver Lake Resources’ cornerstone asset is the Mount Monger Gold Camp located in the eastern goldfields district of Western Australia. In the March quarter, Silver Lake produced 65,548 ounces of gold as well as 438 tonnes of copper. During the quarter the company made record sales of 68,193 ounces of gold at an average price of $2,170 an ounce. Cash and bullion increased 22% to $227 million at the end of the March quarter with no debt. 

The Silver Lake share price is currently trading for $2.30, a gain of 64% since the start of 2020.

More reading

• Up 31% in 1 month: is the Saracen share price a buy?
• Is the gold price too high for investing in ASX gold shares?
• These were the best performing ASX 200 shares last week
• Silver Lake share price up 6% on resource upgrade
• Why Kogan, Netwealth, Silver Lake, & Zip Co shares are storming higher

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 ASX gold shares to hedge against uncertainty appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ChHqk0

The BWX Ltd (ASX: BWX) share price has returned from its trading halt and is storming higher.

At the time of writing the personal care products company’s shares are up 7% to $3.91.

Why was the BWX share price in a trading halt?

On Thursday BWX requested a trading halt in order to undertake a $50 million equity raising. This comprised a $40 million fully underwritten institutional placement at $3.40 per share (a discount of 7.1% to its last close price) and a $10 million share purchase plan.

The company behind the Sukin brand advised that the funds would primarily be used for the development and construction of a game-changing, world class manufacturing facility

BWX’s Chief Operations Officer, Rory Gration, explained: “This future world-class facility is expected to significantly boost BWX’s in-house manufacturing capacity, capability and competitive advantage; provide up-skilling opportunities for our team; and enhance the ways in which we serve our retail partners, customers, and consumers all over the world.”

“We believe this is an ambitious plan but one that creates further earnings potential to deliver sustainable returns and long-term value creation to shareholders.” he added.

Placement complete.

The good news for BWX is that the manufacturing facility came a step closer to becoming a reality this morning after the company successfully completed its $40 million institutional placement.

BWX advised that it received strong interest from existing offshore and Australian institutional shareholders, as well as other institutional investors. This led to demand significantly exceeding the funds BWX was seeking to raise.

BWX’s CEO and Managing Director, Dave Fenlon, commented: “We are very pleased with the strong support from our institutional shareholders who are right behind our plans to transform BWX’s operating model with the development of a new world-class manufacturing facility.”

“Following a strong FY20 trading performance, we are committed to using the Placement proceeds to invest in the new facility which we expect can solve capacity constraints, unlock significant efficiency gains, and deliver growth over and above our Three Year Strategic Plan,” he concluded.

FY 2020 performance.

Speaking of its FY 2020 trading performance, BWX released a trading update with its equity raising announcement.

According to the release, in FY 2020 BWX delivered a 25% increase in unaudited revenue to $187.6 million and a 30% lift in EBITDA (pre-AASB 16) to $27.5 million. This was in line with its FY 2020 guidance of 20% to 25% revenue growth and 25% to 35% EBITDA growth.

On the bottom line things were even better, with BWX reporting a 48% jump in unaudited statutory net profit after tax to $14.1 million.

More reading

• Market close: ASX 200 drops 0.7% today
• BWX delivers strong growth in FY 2020 and announces $50 million equity raising
• Leading brokers name 3 ASX shares to buy today
• 3 ASX shares that could make a big turnaround
• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post BWX share price storms higher after $40 million placement and strong FY 2020 growth appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jbOpM3

The Integrated Research Limited (ASX: IRI) share price is on watch this morning after the technology provider announced it expects to report record revenue and profit in FY20. Revenues and profit are expected to grow between 8% and 11% and FY20. 

What does Integrated Research do? 

Integrated Research is involved in the design and implementation of technology that optimises business operations, predicts disruptions, and automates business processes. Now with over 1,000 customers in 60 countries, Integrated Research provides performance management software for critical IT infrastructure, payments, and unified communications. 

What did Integrated Research announce? 

Integrated Research announced that, based on internal management accounts, it anticipates record revenues and profit in FY20. The company expects total revenue to be in the range of $109.5 million to $111 million, which represents growth of 9% to 10% on the prior corresponding period. Total profit after tax is expected to be in the range of $23.6 million to $24.2 million, compared to $21.9 million in FY19, representing growth of 8% to 11%. 

How has Integrated Research been performing? 

The Integrated Research share price took a tumble in the March downturn but has since recovered and surpassed previous highs. From a low of $2.34 in March, the Integrated Research share price has gained 65% and is currently trading at $3.87. As a result of the rise in the share price, Integrated Research’s price-to-earnings ratio now sits around 30. 

In the first half, Integrated Research reported its fifth consecutive year of interim profit growth. Total revenue increased 6% to $53.2 million and profit after tax increased 1% to $11.8 million. A fully franked interim dividend of 3.5 cents per share was paid. Significant sales during the half year came from AT&T, BT, Capgemini, ANZ, and HCL Technologies. with over 95% of the company’s revenue derived outside Australia. 

In the company’s first half announcement, chair Paul Brandling stated, “the company is well positioned to deliver on its hybrid cloud strategy as a result of the new SaaS platform going live and ready for first beta customers to trial its new Payment Assurance products over the coming months.”

What is the outlook for Integrated Research? 

Integrated Research has been steadily increasing its earnings per share over recent years. With share prices frequently following earnings per share, an appreciation in the Integrated Research share price could be expected if it can continue to grow earnings. 

More reading

• Rio Tinto share price on watch after Q2 production update
• Westpac share price on watch after being hit with flex commissions class action
• Why this fundie sees an ASX bank share recovery
• Are Transurban shares a hot buy today?
• Why I would buy NAB and this ASX dividend share

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Integrated Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Integrated Research share price on watch as record profit anticipated appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Wrrd2M

The Rio Tinto Limited (ASX: RIO) share price will be one to watch this morning after the release of its second quarter production update.

How did Rio Tinto perform?

During the second quarter Rio Tinto reported 86.7Mt of Pilbara iron ore shipments, which brought its first half shipments to a total of 159.6Mt. This was a 1% and 3% increase, respectively, on the prior corresponding periods.

Pleasingly, the mining giant achieved higher production in the second quarter despite the impact of COVID-19 related operational controls.

Another positive was the price Rio Tinto commanded for its iron ore. It revealed a Pilbara iron ore FOB average realised price of US$86.5 per dmt in the second quarter and US$85.4 per dmt for the half.

Also performing well were its Bauxite and Iron Ore pellets operations. Bauxite production came in 9% higher for the quarter at 14.6Mt (+8% for the half) and iron ore pellets production was up 9% for the quarter to 2.8Mt (+6% for the half).

This offset weaker Aluminium, Copper, and Titanium dioxide production during the quarter and half. For the first half, aluminium production was down 2%, copper production fell 5%, and titanium dioxide production reduced by 7%.

Iron ore guidance on track.

Rio Tinto’s Chief Executive, J-S Jacques, was pleased with the company’s performance and notes that it is on track to achieve its iron ore guidance in FY 2020.

He said “We delivered a strong performance, particularly in iron ore and bauxite, demonstrating the underlying resilience of our business and ability to adapt in difficult conditions. Our iron ore assets are performing well in a strong pricing environment and we are on track to meet our 2020 iron ore guidance.”

The chief executive also spoke about the pandemic and the heavily criticised events at Juukan Gorge during the quarter.

“Our focus is to maintain a business as usual approach with many safeguards at a very unusual time. Our operational teams are continuing to run our assets safely so we can continue to contribute to local and national economies and serve our customers. We remain even more committed to our relationship with communities, following the Juukan Gorge events in the Pilbara, and we are engaging extensively with Traditional Owners around our operations and across Australia,” Mr Jacques added.

He concluded: “We are executing our value over volume strategy to drive performance, productivity and free cash flow per share. We will remain agile and ready to adapt to the changing operating and macro environment.”

Guidance.

Rio Tinto’s capital expenditure is expected to be around US$6 billion in FY 2020, compared to previous guidance of US$5 billion to US$6 billion. This is due to an appreciation in its major operating currencies against the US dollar since the first quarter and a reduced impact of COVID-19 on both sustaining and development expenditure.

After which, capital expenditure for FY 2021 and FY 2022 is expected to be around US$7 billion per year, up from US$6.5 billion. This guidance includes spend from 2020 that has been re-phased as a result of COVID-19 restrictions. 

Elsewhere, Rio Tinto’s production guidance remains unchanged across all commodities and it continues to target iron ore shipments of 324Mt to 334Mt this year.

More reading

• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Leading brokers pick the latest ASX 200 stocks to buy today
• Could Fortescue and BHP shares climb higher in 2020?
• 3 blue chip ASX 200 dividend shares to buy in the next market correction
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Rio Tinto share price on watch after Q2 production update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30hoVV5

The Westpac Banking Corp (ASX: WBC) share price will be on watch on Friday after confirming that it has been hit with another class action.

What has Westpac announced?

This morning Westpac confirmed that it has been named in a class action brought by law firm Maurice Blackburn in relation to allowing automotive dealerships to charge customers flex commissions on car finance.

Flex commissions allowed automotive dealerships to set the interest rate on car loans above a base rate set by the bank and take a cut of the difference.

The practice was banned by ASIC in 2018 on the belief that they could encourage car dealers and finance brokers to arrange car loans at the highest possible interest rate. The regulator noted that the higher the interest rate, the larger the commission earned by the dealer or broker.

Who is impacted?

This class action has been filed by Maurice Blackburn on behalf of certain plaintiffs and group members in relation to the payment of flex commissions to auto dealers pursuant to automobile finance agreements signed during the period 1 March 2013 to 31 October 2018 inclusive.

According to the AFR, Maurice Blackburn’s national head of class actions, Andrew Watson, believes there could be as many as 400,000 unsuspecting car buyers that have been negatively impacted by the practice.

He said: “This case will seek to prove that Westpac and St George failed to comply with their obligations under consumer credit protection laws and that this failure caused substantial losses for many consumers.”

At this stage it is unclear what the financial damage of a successful claim would be. At present, the claim seeks to recover “damages of an unspecified amount.”

Westpac has advised that it intends to defend the claim and notes that other similar claims may be filed by other law firms.

More reading

• Why this fundie sees an ASX bank share recovery
• Why Goldman Sachs’ revenue surge bodes well for the Macquarie Group share price
• ASX 200 jumps 1.3%: Big four banks drop lower, Afterpay up after U.S. update
• Biggest dividend cuts in 10 years to hit ASX investors next month
• ASX 200 down 0.5%: Altium sales update, Afterpay tumbles, Breville shoots higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Westpac share price on watch after being hit with flex commissions class action appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32rZK4W